India’s GST revenue experienced a robust surge in March, driven by increased imports and domestic sales, signaling a positive trend for fiscal stability despite looming global economic challenges.
Illustration: Dominic Xavier/Rediff
Key Points
- India’s GST revenues grew by approximately 9% in March, reaching over Rs 2 lakh crore, driven by increased imports and domestic sales.
- GST rate reductions on about 375 items and the merging of tax slabs impacted revenue collection trends.
- Strong import GST collections significantly contributed to the overall GST growth, indicating increased import activity.
- Experts anticipate a cautious trajectory for GST collections in April due to geopolitical headwinds and global inflationary pressures.
- Overall GST collections reinforce fiscal stability and align with India’s GDP expansion.
Gross domestic revenues rose 5.9 per cent to over Rs 1.46 lakh crore, while those from imports grew 17.8 per cent to Rs 53,861 crore during the month.
The gross Goods and Services Tax (GST) mop-up was Rs 1.83 lakh crore in March 2025.
March 2026 saw the third-highest collection in the 2025-26 fiscal (April-March), with April 2025 recording the highest-ever GST revenues at over Rs 2.36 lakh crore, followed by May’s collection at over Rs 2.01 lakh crore.
For the full 2025-26 fiscal, GST collections grew 8.3 per cent YoY to over Rs 22.27 lakh crore.
Impact of GST Rate Changes
GST rates on about 375 items were slashed, making goods cheaper, effective September 2025.
Also, four tax slabs of 5, 12, 18 and 28 per cent were merged into two of 5 and 18 per cent, with the highest 40 per cent slab for a select few ultra luxury goods and tobacco products.
The GST collection initially dipped in the first month of tax cut implementation, with revenues declining to Rs 1.70 lakh crore in November.
It rose to Rs 1.74 lakh crore in December and further to Rs 1.93 lakh crore in January.
In February, it was over Rs 1.83 lakh crore.
Refund issuance during March rose 13.8 per cent to Rs 22,074 crore, the latest data showed.
After adjusting refunds, net GST revenues in March stood at about Rs 1.78 lakh crore, up 8.2 per cent year-on-year.
Expert Analysis and Future Outlook
Deloitte India Partner M S Mani said while these collections indicate that the consumption sentiment continues to be strong, it is interesting to see that the 8 per cent plus growth in the gross GST collections has been significantly helped by the very strong collections in the import GST numbers.
“There has been a significant increase in imports, which has contributed to the GST collections on imports; this would also have led to a significant increase in the customs duty collections,” Mani said.
While large states such as Maharashtra, Karnataka and Telangana continue to show robust growth in collections, states such as Haryana, Andhra Pradesh, and Madhya Pradesh demonstrate slower growth.
EY India Tax Partner Saurabh Agarwal said, “Looking ahead in April, we anticipate a cautious trajectory. Geopolitical headwinds and global inflationary pressures are likely to compress consumption demand.”
While the traditional year-end sales may provide a tactical buffer, the mid-term outlook necessitates continued policy intervention to sustain manufacturing momentum against global volatility, Agarwal said
Tax Connect Advisory Services, Partner, Vivek Jalan said, “Overall, GST collections not only reinforce fiscal stability but also validate the broader macroeconomic narrative that India’s tax system is keeping pace with GDP expansion, providing governments and businesses alike with confidence in the sustainability of growth.”
